SCOTTSDALE, Ariz. – If Deb Jones had to choose one word that describes what's been the key to the success of CU Realty, LLC, she'd say "flexibility." That mantra not only applies to the credit union franchise's attitude towards its own CUSO businesses, but also describes the evolution of its own business model and history. "We don't tell our CUSOs how to run their business. We have an operating agreement with them that outlines the franchise and provides them marketing and program oversight, as well as technology," said CU Realty President Deb Jones. "Other than that though we look at CU Realty as a supplement to their own real estate program." Most credit unions today are familiar with CU Realty as the franchise owner of separate multi-owned CU Realty CUSOs, but it wasn't always that way. When the company was formed in Arizona in 2001, it formed single relationships with individual credit unions there. By the time it expanded next in Colorado in 2003, Jones said "we realized the benefits when credit unions come together and work collaboratively." Since then, most of the CUSOs owned by CU Realty are multi-owned. There are some exceptions though to that paradigm – in Fairborn, Ohio, Wright Patt "aggressively" markets its own program, and in Las Vegas, Nevada FCU is a single owner and has hired its own broker and agents. Jones said she wouldn't be surprised if "down the line" some of the programs migrate to the Nevada model. Continuing with its business philosophy of flexibility and remaining innovative, in June 2003, CU Realty formed Personal Credit Solutions, LLC, Eagen, Minn., an alternative lending CUSO that was formed through Members Gateway of which Jones is senior vice president. The CUSO has three investors – Member Gateways, Gateways Services and Affinity Plus – and is licensed to do mortgage brokering in 17 states. "We're an alternative to saying `no' to the member," she explains. "If a member's loan is declined because they don't fit the credit union's credit criteria, the application is sent to us to broker the loan." The objective, Jones adds, is not to have the member go to a predatory lender for the loan and to educate them on how to improve their credit score so they can use their credit union for services and not have to go elsewhere. According to Jones, members who are denied loans typically fall into one of three categories. Sometimes, she explained, a member could have a "good" credit score but have unstated income. If a credit union doesn't accept the documentation the member provides, then PCS can provide an investment lender. Other members have low credit scores but not below 490. PCS places these members in a two-year adjustable rate loan with no prepayment penalty and works with them to repair their credit history. When it's time for the loan to be restructured, PCS contacts the member's CU so the member can be referred back to their credit union for a refinanced conforming loan. Members with credit scores below 490 are referred to credit counseling firm Auriton Solutions, Atlanta, Ga. that provides free foreclosure and home ownership counseling. "Once a member reaches this point, we'll work with them until their credit and income are at the point where they'll qualify for a conforming loan," said Jones. According to Jones, "there are hundreds of lenders out there for us to choose from to find suitable loan programs for members. Our objective is to help the member find financial well-being while working with them to restore their credit problems." -

[email protected]